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The new regulation will force Samsung life to sell $16 billion worth of Samsung Electronics stock.

via:博客园     time:2018/7/5 10:10:07     readed:268


Tencent Technology News, according to foreign media reports, because South Korean legislators and regulators try to limit the control of the chaebol family to their business empire, it is expected that more than 16 trillion won (about 14 billion US dollars) of Samsung Electronics stocks flooded into South Korea stock market.

The party where South Korean President Wen Zai is located is preparing to pass a bill in Congress requiring that the shares of any affiliated company held by the insurance company must not exceed 3% of its assets. This rule will also change the current accounting standards in Korea, requiring stocks to be calculated at market value rather than buying costs.

Samsung Life Insurance is the main component of the Lee Kin Hee family's control of Samsung Electronics, requiring the company to reduce its stake in Samsung Electronics and weaken the influence of the Lee family on Samsung Electronics. For Samsung Electronics, which will release its preliminary earnings report on Friday, stock selling is one of the biggest clouds in the hands of the manufacturer. South Korea’s new bill passed at a time when Samsung’s smart smartphone sales were weak and China’s investigation into Samsung’s electronic chip sales conspiracy. After the stock price continued to rise in the past two years, Samsung Electronics' share price has fallen by 9% this year.

“It’s the fatal weakness of Samsung Life that has dragged down Samsung’s share price,” said Jeong Dae-ro, an analyst at Mirae Asset Daewoo. “The Samsung Group does not have a subsidiary that can take over Samsung Electronics shares that Samsung Life will sell. “The Samsung Life Insurance spokesperson said that the company is conducting a comprehensive review to properly manage assets as required according to changes in the regulatory environment. ”

Samsung Electronics’ preliminary report is expected to show a slight decline in the company’s revenue during the quarter ending in June. After the official financial report is released at the end of this month, Samsung Electronics will hold a financial conference call.

In the 1970s, Samsung Life bought less than 600 billion won to buy shares in Samsung Electronics. Today, the market value of these stocks has reached 24.6 trillion won, making it the second largest after the South Korean National Pension Service. The second largest shareholder. Li Jianxi holds a 20.8% stake in Samsung Life; his son, Li Zaixi, is the largest shareholder of Samsung C&T Corp., which holds a 19.3% stake in Samsung Life. Li Zaiyi only holds 0.65% of the shares of Samsung Electronics.

Although Samsung is considered to be one of the buyers of Samsung Electronics' stock, it must convince other shareholders that it may face potential risks.

This is not the first time that regulation has put pressure on Samsung Electronics' stock. Samsung Electronics' share price fell 3.5% on May 30, when Samsung Life and Samsung Fire & Marine Insurance said they would sell 27 million shares of Samsung Electronics to mitigate regulatory risks.

The two insurance companies under the Samsung Group sold Samsung Electronics shares in order to comply with the Act on the Structural Improvement of the Financial Industry. Under the Act, a financial group of a corporate group cannot own more than 10% of a non-financial subsidiary. If it exceeds this ratio, it should sell additional shares.

It is at a time when the regulatory pressure on the Samsung Group is growing. The South Korean government, politicians and civil rights organizations have repeatedly called on large Korean companies to abandon the complex cross-shareholding structure. This structure helped the Lee family to control a number of Samsung subsidiaries by holding a small stake. Since serving as chairman of the Korea Fair Trade Commission last year, Kim Sang-jeu has urged the Samsung Group to speed up the process of simplifying the complex owner structure. In addition, Choi Jong-ku, chairman of the Korea Financial Services Commission, also publicly stated that Samsung Group needs to come up with solutions to solve corporate governance problems.

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